[Federal Register Volume 71, Number 184 (Friday, September 22, 2006)]
[Notices]
[Pages 55424-55427]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-8066]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket No. 04-BIS-20]


In the Matter of: Mr. Mohammad Al-Mashan, Jleeb Asoukh Commercial 
Area, Alwaha Complex, First Floor <greek-i>1, Safat, Kuwait, and P.O. 
Box 5909, Safat 13060 Kuwait, Respondent; Decision and Order

    In a charging letter filed on October 25, 2004, the Bureau of 
Industry and Security (``BIS'') alleged that Respondent, Mr. Mohammad 
Al-Mashan (``Al-Mashan''), committed two violations of the Export 
Administration Regulations (``Regulations''),\1\ issued under the 
Export Administration Act of 1979, as amended (50 U.S.C. app. 2401-2420 
(2000)) (the ``Act'').\2\ Specifically, the charging letter alleged 
that during the period between on or about October 27, 1999 and on or 
about February 23, 2000, Al-Mashan engaged in conduct prohibited by the 
Regulations when he transferred an uncooled infrared camera, an item 
subject to the Regulations and controlled on the Commerce Control List 
for national security reasons, to an individual from the United Arab 
Emirates in violation of a BIS license condition. The BIS license

[[Page 55425]]

that authorized the export of the camera from the United States to Al-
Mashan prohibited the resale, transfer, or reexport of the camera to 
anyone other than the approved end-users on the license without prior 
authorization by the U.S. Government. In transferring the camera to a 
non-approved end-user without prior U.S. Government authorization, Al-
Mashan committed one violation of Section 764.2(a) of the Regulations.
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    \1\ The charged violations occurred from 1999 through 2000. The 
Regulations governing the violations at issue are found in the 1999 
through 2000 versions of the Code of Federal Regulations (15 CFR 
part 730-774 (1999-2000)). Actions taken during this administrative 
enforcement proceeding are governed by the Regulations in effect at 
the time such actions take place.
    \2\ From August 21, 1994 through November 12, 2000, the Act was 
in lapse. During that period, the President, through Executive Order 
12924, which had been extended by successive Presidential Notices, 
the last of which was August 3, 2000 (3 CFR, 2000 Comp. 397 (2001)), 
continued the Regulations in effect under the International 
Emergency Economic PowersAct (50 U.S.C. 1701-1706 (2000)) 
(``IEEPA''). On November 13, 2000, the Act was reauthorized and it 
remained in effect through August 20, 20001. Since August 21, 2001, 
the Act has been in lapse and the President, through Executive Order 
13222 of August 17, 2001 (3 CFR, 2001 Comp. 783 (2002)), which has 
been extended by successive Presidential Notices, the most recent 
being that of August 3, 2006 (71 FR 44,551 (August 7, 2006)), has 
continued the Regulations in effect under IEEPA.
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    The charging letter further alleged that during the period on or 
about October 27, 1999 and on or about February 23, 2000, Al-Mashan 
transferred an uncooled infrared camera, an item subject to the 
Regulations and controlled on the Commerce Control List for national 
security reasons, to an individual from the United Arab Emirates with 
knowledge, or reasons to know, that a violation would subsequently 
occur in connection with the item. Specifically, at the time Al-Mashan 
transferred the camera, he knew, or had reasons to know that the BIS 
license authorizing the export of the camera from the United States to 
Al-Mashan prohibited the resale, transfer, or reexport of the camera by 
Al-Mashan to any entity other than those listed on the license as 
approved end-users without prior U.S. Government authorization. In 
transferring the camera with such knowledge, Al-Mashan committed one 
violation of Section 764.2(e) of the Regulations.
    In accordance with Section 766.3 of the Regulations, on October 25, 
2004, BIS mailed the notice of issuance of the charging letter by 
registered mail to Al-Mashan at his last known address. The charging 
letter was returned to BIS unopened. As stated in the ALJ's Recommended 
Decision and Order, although service of the notice of issuance of the 
charging letter by registered mail did not result in actual delivery of 
the charging letter, MAMG constructively refused delivery of the 
charging letter when it was served in accordance with Section 766.3 of 
the Regulations but returned to BIS as undeliverable. To date, Al-
Mashan has not filed an answer to the charging letter with the ALJ, as 
required by the Regulations.
    In accordance with Section 766.7 of the Regulations, and because 
more than thirty days had passed since delivery of the charging letter 
was constructively refused, BIS filed a Motion for Default Order on 
July 19, 2006. This Motion for Default Order recommended that Al-Mashan 
be denied export privileges for a period of ten years. Pursuant to 
Section 766.7(a) of the Regulations, ``[f]ailure of the respondent to 
file an answer within the time provided constitutes a waiver of the 
respondent's right to appear,'' and ``on BIS's motion and without 
further notice to the respondent, [the ALJ] shall find the facts to be 
as alleged in the charging letter.''
    On August 30, 2006, based on the record before him, the ALJ found 
Al-Mashan to be in default, and he issued a Recommended Decision and 
Order in which he found that Al-Mashan committed one violation of 
Section 764.2(a) and one violation of Section 764.2(e) of the 
Regulations. The ALJ recommended the penalty of denial of Al-Mashan's 
export privileges for a period of ten years.
    The ALJ's Recommended Decision and Order, together with the entire 
record in this case, has been referred to me for final action under 
Section 766.22 of the Regulations.
    I find that the record supports the ALJ's findings of fact and 
conclusions of law. I also find that the penalty recommended by the ALJ 
is appropriate, given the nature of the violations, the lack of 
mitigating circumstances, and the importance of preventing future 
unauthorized exports.
    Based on my review of the entire record, I affirm the findings of 
fact and conclusions of law in the ALJ's Recommended Decision and 
Order.
    Accordingly, It is Therefore Ordered,
    First, that, for a period of ten (10) years from the date this 
Order is published in the Federal Register, Mohammad Al-Mashan, Jleeb 
Asoukh Commercial Area, Alwaha Complex, first Floor <greek-i>1, Safat, 
Kuwait and with an address at P.O. Box 5909, Safat 13060 Kuwait (``Al-
Mashan''), its successors and assigns, and when acting for or on behalf 
of Al-Mashan, his representatives, agents, assigns and employees 
(``Denied Person''), may not, directly or indirectly, participate in 
any way in any transaction involving any commodity, software or 
technology (hereinafter collectively referred to as ``item'') exported 
or to be exported from the United States that is subject to the 
Regulations, or in any other activity subject to the Regulations, 
including, but not limited to:
    A. Applying for, obtaining, or using any license, License 
Exception, or export control document;
    B. Carrying on negotiations concerning, or ordering, buying, 
receiving, using, selling, delivering, storing, disposing of, 
forwarding, transporting, financing, or otherwise servicing in any way, 
any transaction involving any item exported or to be exported from the 
United States that is subject to the Regulations, or in any other 
activity subject to the Regulations; or
    C. Benefitting in any way from any transaction involving any item 
exported or to be exported from the United States that is subject to 
the Regulations, or in any other activity subject to the Regulations.
    Second, that no person may, directly or indirectly, do any of the 
following:
    A. Export or reexport to or on behalf of the Denied Person any item 
subject to the Regulations;
    B. Take any action that facilities the acquisition or attempted 
acquisition by the Denied Person of the ownership, possession, or 
control of any item subject to the Regulations that has been or will be 
exported from the United States, including financing or other support 
activities related to a transaction whereby the Denied Person acquires 
or attempts to acquire such ownership, possession or control;
    C. Take any action to acquire from or to facilitate the acquisition 
or attempted acquisition from the Denied Person of any item subject to 
the Regulations that has been exported from the United States;
    D. Obtain from the Denied Person in the United States any item 
subject to the Regulations with knowledge or reason to know that the 
item will be, or is intended to be, exported from the United States; or
    E. Engage in any transaction to service any item subject to the 
Regulations that has been or will be exported from the United States 
and that is owned, possessed or controlled by the Denied Person, or 
service any item, of whatever origin, that is owned, possessed or 
controlled by the Denied Person if such service involves the use of any 
item subject to the Regulations that has been or will be exported from 
the United States. For purposes of this paragraph, servicing means 
installation, maintenance, repair, modification or testing.
    Third, that, after notice and opportunity for comment as provided 
in Section 766.23 of the Regulations, any person, firm, corporation, or 
business organization related to the Denied Person by affiliation, 
ownership, control, or position of responsibility in the conduct of 
trade or related services may also be made subject to the provisions of 
this Order.
    Fourth, that this Order does not prohibit any export, reexport, or 
other transaction subject to the Regulations where the only items 
involved that are subject to the Regulations are the foreign-produced 
direct product of U.S.-origin technology.

[[Page 55426]]

    Fifth, that this Order shall be served on the Denied Person and on 
BIS, and shall be published in the Federal Register. In addition, the 
ALJ's Recommended Decision and Order, except for the section related to 
the Recommended Order, shall be published in the Federal Register.
    This Order, which constitutes the final agency action in this 
matter, is effective upon publication in the Federal Register.

    Dated: September 18, 2006.
Mark Foulon,
Acting Under Secretary of Commerce for Industry and Security.

Recommended Decision and Order

    On October 24, 2004, the Bureau of Industry and Security, U.S. 
Department of Commerce (``BIS''), issued a changing letter initiating 
this administrative enforcement proceeding against Mohammad Al-Mashan 
(``Al-Mashan''). The charging letter alleged that Al-Mashan committed 
one violation of Sec.  764.2(a) and one violation of Sec.  764.2(e) of 
the Export Administration Regulations (currently codified at 15 CFR 
parts 730-774 (2006)) (the ``Regulations'').\1\ The Regulations are 
issued under the Export Administration Act of 1979, as amended (50 
U.S.C. app. 2401-2420 (2000))(the ``Act'').\2\ In accordance with Sec.  
766.7 of the Regulations, BIS has moved for the issuance of an Order of 
Default against Al-Mashan as Al-Mashan has failed to file an answer to 
the allegations in the charging letter issued by BIS within the time 
period required by law.

A. Legal Authority for Issuing an Order of Default

    Section 766.7 of the Regulations states that BIS may file a motion 
for an order of default if a respondent fails to file a timely answer 
to a charging letter. That section, entitled Default, provides in 
pertinent part:

    Failure of the respondent to file an answer within the time 
provided constitutes a waiver of the respondent's right to appear 
and contest the allegations in the charging letter. In such event, 
the administrative law judge, on BIS's motion and without further 
notice to the respondent, shall find the facts to be as alleged in 
the charging letter and render an initial or recommended decision 
containing findings of fact and appropriate conclusions of law and 
issue or recommend an order imposing appropriate sanctions.

15 CFR 766.7 (2006).

    Pursuant to Sec.  766.6 of the Regulations, a respondent must file 
an answer to the charging letter ``within 30 days after being served 
with notice of the issuance of the charging letter'' initiating the 
proceeding.
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    \1\ The violations charged occurred from 1999 through 2000. The 
Regulations governing the violations at issue are found in the 1999 
through 2000 versions of the Code of Federal Regulations (15 CFR 
parts 730-774 (1999-2000)). Actions taken during this administrative 
enforcement proceeding are governed by the Regulations in effect at 
the time such actions take place.
    \2\ From August 21, 1994 through November 12, 2000, the Act was 
in lapse. During that period, the President, through Executive Order 
12924, which had been extended by successive Presidential Notices, 
the last of which was August 3, 2000, 3 CFR, 2000 Comp. 397 (2001), 
continued the Regulations in effect under the International 
Emergency Economic Powers Act, 50 U.S.C. 1701-1706 (2000) 
(``IEEPA''). On November 13, 2000, the Act was reauthorized and it 
remained in effect through August 20, 2001. Since August 21, 2001, 
the Act has been in lapse and the President, through Executive Order 
13222 of August 17, 2001, 3 CFR, 2001 Comp. 783 (2002), as extended 
by the Notice of August 2, 2005, 70 FR 45273 (Aug. 5, 2005), has 
continued the Regulations in effect under the IEEPA.
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B. Service of the Notice of Issuance of Charging Letter

    In this case, BIS served notice of issuance of the charging letter 
in accordance with Sec.  766.3(b)(1) of the Regulations when it sent a 
copy of the charging letter by registered mail to Al-Mashan at his last 
known address on October 25, 2004. After the letter was returned 
unopened, BIS then sent a copy of the charging letter by registered 
mail to Al-Mashan at the only other known address for him. That letter 
was also returned to BIS, but postage marks indicated that the letter 
had remained in Kuwait for approximately one month. Finally, in one 
last attempt to provide actual notice to Al-Mashan, BIS mailed a copy 
of the charging letter to his last known address via Federal Express. 
The final letter was delivered.
    Although there is no evidence that the letters were actually 
refused by Al-Mashan himself, Al-Mashan is determined to have 
constructively refused delivery as of the date upon which the notice 
that was sent out on October 25, 2004 was returned to BIS. I find that 
the delivery of a charging letter is deemed constructively refused when 
the letter has been properly served at the respondent's last known 
address in accordance with Sec.  766.3 of the Regulations but has been 
returned to BIS as undeliverable. See In re Export Materials, Inc. 
(Docket No. 98-BXA-09), 64 FR 40820, (July 28, 1999) (Decision and 
Order); see also In re Modern Engineering Services, Ltd. (Docket No. 
97-BXA-01), 65 FR 81822 (Dec. 27, 2000) (Decision and Order). BIS may 
legally pursue a default judgment against him because more than thirty 
(30) days have passed without response from Al-Mashan.

C. Summary of Violations Charged

    The charging letter issued by BIS included a total of two charges. 
Specifically, the charging letter alleged that during the period 
between on or about October 27, 1999 and on or about February 23, 2000, 
Al-Mashan engaged in conduct prohibited by the Regulations when he 
transferred an uncooled infrared camera, an item subject to the 
Regulations, to an individual from the United Arab Emirates in 
violation of a BIS license condition. The BIS license that authorized 
the export of the camera from the United States to Al-Mashan prohibited 
the resale, transfer, or reexport of the camera to anyone other than 
the approved end-users on the license without prior authorization by 
the U.S. Government. In transferring the camera to a non-approved end-
user without prior U.S. Government authorization Al-Mashan committed 
one violation of Sec.  764.2(e) of the Regulations.
    The charging letter further alleged that during the period on or 
about October 27, 1999 and on or about February 23, 2000, Al-Mashan 
transferred an uncooled infrared camera, an item subject to the 
Regulations, to an individual transferred from the United Arab Emirates 
with knowledge or reason to know that a violation would subsequently 
occur in connection with the item. Specifically, at the time Al-Mashan 
transferred the camera, he knew or had reason to know that the BIS 
license authorizing the export of the camera from the United States to 
Al-Mashan prohibited the resale, transfer, or reexport of the camera by 
Al-Mashan to any entity other than those listed on the license as 
approved end-users without prior U.S. Government authorization. In 
transferring the camera with such knowledge, Al-Mashan committed one 
violation of Sec.  764.2(e) of the Regulations.

D. Penalty Recommendation

[Redacted Section]

[Redacted Section]

E. Conclusion

    Accordingly, I am referring this Recommended Decision and Order to 
the Under Secretary of Commerce for Industry and Security for review 
and final action for the agency, without further notice to the 
Respondent, as provided in Sec.  766.7 of the Regulations.
    Within thirty (30) days after receipt of this Recommended Decision 
and Order, the Under Secretary shall issue a written order affirming, 
modifying, or vacating

[[Page 55427]]

the Recommended Decision and Order. See 15 CFR 766.22(c).

Done and Dated August 30, 2006.

Joseph N. Ingolia,

Chief Administrative Law Judge.

[FR Doc. 06-8066 Filed 9-21-06; 8:45 am]
BILLING CODE 3510-33-M